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Bahrain Air hopes to break even next year

Manama, March 14, 2010

Bahrain's first low-cost airline, Bahrain Air, hopes to break even next year as it shakes off the recession and expands its operations.

The board also plans to increase the company's authorised capital to BD30 million ($79.6 million) from the present BD20 million, in the coming months, said managing director Ibrahim Al Hamer.

"Hopefully, the troubles of the world economic crisis are behind us and things are looking up, but we have to keep our fingers crossed as we look towards a complete recovery," Al Hamer told the Gulf Daily News, our sister newspaper.

The airline, which launched operations in February 2008, has a 68 per cent Bahraini shareholding, while 32pc is owned by Saudi investors.

"We started off at the peak of an economic boom when the world was a happier place. Things were looking perfect at that time and we wanted to consolidate very fast," said Al Hamer.

"However, in just a few months, things started to go bad and in September that year, the economic crash happened."

He said the aviation industry was wholly dependent on the global economic situation.
 "When the crash happened, every airline took a hit and we were not an exception. Suddenly, we realised there was twice as much capacity available as was the economic growth. That spelt doom for the industry," said Al Hamer.

He also attributed some of the aviation industry's problems to the swine flu epidemic, since "people just did not want to travel." But the storm clouds have passed and there are blue skies ahead, he said.

"That was a period of trial and its over. We are hoping to attract more passengers and get going," he said.

Starting this month, Bahrain Air began offering free meals on all its flights. "Though we are a low-cost model and did not offer this facility, we have started it on a three-month trial basis. Already, there is a huge response but we shall wait and see how it goes before we decide to make it a permanent feature," said Al Hamer.

The company offices will move to a new, purpose-built headquarters in Busaiteen at the beginning of next year. "That building is already under construction and moving there will give our identity a whole new push," he said.

The airline, which is starting daily flights to Bangladesh (three to Dhaka and four to Chittagong) on Tuesday, and a daily flight to Istanbul in Turkey on June 16, already operates to 19 destinations from Bahrain, with a fleet consisting of four Airbus A-320's and two Airbus A-319's.

"We still have some 'spare capacity' on the planes that we have and will look at expanding on the size of the present network, without ordering more aircraft," said Al Hamer.

"We expect more aircraft to come in but not in the next two years."

The airline's jets currently fly with an average 80 per cent load factor, he said.

Al Hamer said the airline had been hit by the global recession and its aftermath, but this had not resulted in any job losses. "However, there have been some performance-driven cutbacks, like in any other business enterprise," he said.

Al Hamer said that in spite of all the hiccups and the economic issues, the airline had continuously maintained a 96 per cent to 97pc on-time performance, which "is getting better."  - TradeArabia News Service

 




Tags: Airline | profit | Bahrain Air | routes |

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